AWB was 'under scrutiny' in 2004

By Lachlan Colquhoun
March 22, 2006
The Financial Times
Original Source: http://news.ft.com/cms/s/0ced9f78-b949-11da-b57d-0000779e2340.html

Senior staff from Australia's Department of Foreign Affairs and Trade warned two government ministers in 2004 of allegations that AWB, the wheat exporter, was paying kickbacks to the former Iraqi regime of Saddam Hussein.
Classified submissions tendered at the Cole inquiry into the affair showed that a department staff member wrote to Alexander Downer, foreign affairs minister, and Mark Vaile, trade minister, in March 2004 warning them that UN investigators were examining AWB's conduct.
Any company doing oil-for-food business in Iraq could not have escaped being implicated in inappropriate activity whether or not they were aware of it, the diplomatic minute said.
Headed by retired judge Terence Cole, the inquiry in Sydney is investigating claims, first raised publicly by the United Nations' Volcker report last year, against Australia's monopoly wheat exporter, AWB.
It is alleged AWB paid about A$300m ($215m) to Alia, a Jordanian-based trucking company, in exchange for the import of wheat under the United Nations oil-for-food programme. It is claimed that Alia was a front for Saddam Hussein's regime and that the money paid to the company went directly to the former Iraqi Government.
The government of John Howard, prime minister, has continually said it was unaware of any allegations against the AWB until last year, shortly before the publication of the Volcker report. The tendering of the document from March 2004 follows the earlier tabling of a cable from Australia's representative office in Iraq dated June 2003, which referred to an alert from a US Army official, who asked governments to look for evidence of kickbacks in dealings with Iraq.
In spite of claims from Australia's Labor opposition party that the tabled documents had sent the government's credibility up in a puff of smoke, Mr Downer said the evidence had vindicated his position that he was unaware of concerns over AWB until he received the March 2004 note. This minute simply proves the point that until I received this minute, I wasn't aware of serious concerns that the AWB was paying kickbacks nor was Mr Vaile, Mr Downer said. When the minute arrived I had demonstrated - if I may say so - characteristic diligence in ensuring the department followed up the issue.
While Mr Vaile simply signed the minute, Mr Downer had made a handwritten note saying: This worries me. How were AWB prices set and who set them? I want to know about this.
At the inquiry yesterday, a former senior DFAT official said she was aware of allegations of AWB kickbacks. But the company had vigorously denied the claims, and she said she did not believe it was her responsibility to carry out any further checks on the contracts.